Car Industry

Tesla ramps up to Model 3 with Grohmann Engineering acquisition

Why buy the machines, when you can buy the company that builds the machines?

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At this rate, Tesla will acquire every company on Earth by 2023.

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When a car company is preparing for a massive ramp in production, it can't just focus on the cars -- it needs to focus on the methods of production, as well. That's a major reason behind Tesla's move to acquire Germany's Grohmann Engineering.

Tesla has entered into an agreement to purchase Grohmann, a company that focuses on automated manufacturing, the automaker said in a blog post. The combined companies will focus on building "the most advanced [factories] in the world." The goal is to speed up production and improve quality while reducing per-car expenditures.

Grohmann's headquarters in Prüm, Germany will serve as the base for what Tesla calls Tesla Advanced Automation Germany. The company plans to hire over 1,000 engineers and technicians over the next two years to help advance its manufacturing efforts ahead of production of the Model 3, its cheapest car to date.

Tesla and Grohmann have already put their heads together regarding Model 3 production, but this move signifies Tesla's commitment to get its ducks in a row ahead of the release. Despite a 400-percent increase in production of Model S and Model X vehicles, it's still far from its goal of producing 500,000 cars per year by 2018. Given the initial reliability concerns with its small-batch Model X, it's vital that Tesla gets the Model 3 right first time.